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Cost management in entrepreneurship is a vital determinant in the efficient management of a successful business venture. Let's get started,,,

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Cost is a major integral part of every business venture. It might either be a fixed or variable cost. This is the combined value put together to achieve an outcome. The resources, services, and other factors of production put in place to achieve a new product are the cost of the product.

Cost may be said to be fixed when the parameters or indices of determinants required for production remain unchanged without being affected by factors of production. That is to say, production volume, inflation, supply chain demands, etc does not alter its value. Examples are salaries and rents.

In contrast, we all know that variable costs are values of varying factors that change over time. When the factors of production affect the cost required to achieve the same product. In this case, we may find the volume of transactions, prices of raw materials, and other indices determining costs here. It varies based on the prices of other factors.

However, cost management of production costs is as important as the life wire of any business venture. We can not remove this variable from factors of production as it is a key determinant to having an assertive value for goods and services rendered to the public. It draws its source from a proper auditing of all processes during production.

It helps the entrepreneur to have a specific and determined value for product price. A proper calculation of all fixed and variable costs of production would help for adequate price fixing and value for services rendered. This is the only time an entrepreneur can benefit or profiteer from all sales activities made.

Effective cost management also helps during decision marking. Decision-making is necessary for business ventures, be it startups or existing firms. It allows them to make immediate, intermediate, and long-term plans for effective management of overall activities. Some decisions should be made in the spot to broker deals, and if all determinants, the cost of production, aren't on the table, it makes it more difficult.

Effective knowledge of Cost would also help in the financial dealings of the business venture. As an entity, it cannot spend recklessly and this should be done in a manner that requires effectiveness. It should be used for future transactions, both on the assets and liabilities flowchart.

Lastly, it gives a sense of direction and growth. Good knowledge of cost implication guides us in its simplicity in terms of how best we are fairing at every moment. If we are trading below the cost of production, we are already trending in the negative. It is a proper guide to growth potential. Proper cost pricing ensures more viability and sustainability of the business ventures.

These are two words that seem to have close meanings. However, there are distinctive differences between these two words. While one applies directly as a determinant to product pricing, the other does not as they need outside the venture's production line.

In a business venture that deals with sales communication products such as recharges, SIM cards, Routers, MiFI, etc., it will take into cognizance the investment, which is the cost. In a business venture of such, the cost would factor in the cost of the business facility, purchases on recharges/Mifi/routers/SIM cards, and as well as the registration processes that get them ready for the end users.

Whereas the expenses incurred in the same venture may be from government taxes on business premises, services or use of generating set from power outages, stipends to administrative staff sparingly to motivate and support them, etc.

We have to note that cost would add up to help profer a tenable product pricing value before getting to consumers or end users, whereas expenses are outside this cost cycle. They are ordinarily removed from generated revenues or incomes before profit generation.

The investment/cost determines the final product price, and hence income generated, while expenses are deductions made after a complete cycle of the production cost to determine if our balance sheet for the period is on course.

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A good cost determination is the life wire of a successful business venture. This is a narrative that induces consciousness into all pricing lines for effective business profitability. Let's check out some of the benefits below:

Financial Cost Benefits:

Effective cost determination brings about an efficient financial business responsibility. When we have true value cost product pricing, we will certainly optimize revenue generation. It would allow for better decision-making towards making the best allocation of finances to areas with potential and how best to make investment additions tailored towards expansion.

Operational Cost Benefits:

Operational know-how knowledge is key as management and allocation of resources during the production cycle are optimized. In this case, we limit wastage and optimize all variables because we already know the cost analysis of all factors.

Strategic Plan Cost Benefits:

This is for better business performance. Strategic plans could be made from data derived from cost-benefit analysis while relating to business standards. Be sure we invest rightly, anticipate positively before driving expansion, compare competition pricing modules with commensurate implementation, and maximize product pricing.

For Regulation and Compliance cost Benefits:

This requires us to have an effective financial record that would give a proper guide for tax payments, management of profit and loss auditing, and transparency for public use. This makes it easy for us to always fall back on when we need to open books to ascertain the health of a business venture.

Employee Guide Benefits:

We can also use data from this to plan how we engage employee recruitment and initiatives for overall performance. Cost-effective schemes should be imbibed for better profitability.

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For a non-entrepreneur to determine the cost of his venture, he should be able to start properly by identifying, classifying, and determining the cost and expenses required for the setup

I should be able to know my objectives and goals. This should be able to give me focus and an overview of my short-term, medium-term, and long-term achievement deliverables.

My main stay in business, which is the investment, sometimes referred to as costs, should be determined and clearly stated. For the communication venture, what product do I need, which is best for my location, what services do I need to render, how many employee staffers do I need, etc

The next as a nonentrepreneur is to have an estimate of what those fixed and variable costs would be. This quickly gives me an overview of all my financial requirements.

Getting the estimated cost would give me an overview of my capital requirement, and hence, I should be able to categorize these costs according to their needs and status. Those important one-offs should be quickly done to allow us to concentrate on variable and continuous costs/expenses.

Lastly, I must track all my expenses on a daily, weekly, and monthly basis to enable me to stay within my target limits and on the path to profitability.

Thank you, friends.
I invite @@@rosselena, @chant, @wilmer1988